Biden administration to tap oil reserves again ahead of midterms

Officials pushed back on whether the announcement of the December decision was redundant with the March approval, saying “it’s not certain” they would have done so had the oil market stabilized. The administration will also soon put in place a process to purchase oil from companies to fill the SPR at a price of $67 to $72 a barrel, officials said. This level is more than $10 below current benchmark prices.

“In terms of taxpayer funding protection [and] being responsible stewards of the SPR, you want to sell when prices are high and you want to buy when they are low,” the official said. “And we wanted to put the marker there at this point that we’ll buy when they’re low.”

President Joe Biden to speak on gasoline prices on Wednesday, White House Chief of Staff Ron Klain said in a tweet.

The move comes as the administration met with oil company executives to negotiate ways to cut fuel prices ahead of midterm elections in which inflation, in part due to high energy prices, will be a key issue.

The administration is also considering another version that would be separate from the one previously authorized, although no decision has been made on whether to do so, the two people said. “It’s on the table, but they haven’t made a decision whether to go with it or not,” one of the people said.

The administration also intends to announce its intention to fill the reservation, said two people familiar with the talks. Details such as what price the administration would pay for the oil and when it would buy were still being worked out in one-on-one meetings with industry representatives, the people said.

Oil prices soared last week after the oil-producing cartel OPEC and its allies announced they would cut collective production by 2 million barrels a day.

Biden had promised a response to OPEC’s decision, though the administration’s options for cutting fuel prices are limited. Prices had already fallen from a recent high of $5.02 a gallon this summer, but began to rise last month due to refinery outages in California and Ohio. The national average price was $3.87 a gallon Tuesday morning, according to AAA.

A release of the northeast heating oil reserve could also be allowed, one of the sources added. This reserve, which contains about 1 million barrels of fuel oil in New England, has not been mined since 2012, according to its website.

The Department of Energy has also raised the possibility of limiting fuel exports in a bid to lower domestic gasoline prices, but the administration has in recent days toned down its rhetoric, according to two industry officials. . Oil company executives and analysts said the move could backfire because it could cause producers to slow down their drilling if they no longer have access to foreign markets, which would raise domestic prices.

“The temperature seems to be dropping on the threat of export controls,” one of the people said. “They still haven’t taken it off the table, but said it won’t happen until the midterms.”

White House and Energy Department officials did not comment.

Adam Cancryn contributed to this report.




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